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TMI Blog2021 (3) TMI 489X X X X Extracts X X X X X X X X Extracts X X X X ..... company which had ceased to exist, it should have filed a suitable application for rectification of mistake before the Asst Commissioner of Income Tax Bangalore for effecting the name change in the assessment order dated 01.03.2013. It was incumbent on the part of the petitioner to have informed the Asst. Commissioner of Income Tax at Bangalore about the merger/amalgamation. In any event, it was for the petitioner to have taken step to correct the name in the assessment order or in the alternative file a composite return for the Assessment Year 2009-10 with the petitioner s PAN Number for both the petitioner and Doosan International India Private Limited and regularized the changes in accordance with the Act. Mere intimation under Section 127 of the Income Tax Act, 1961 for transfer the file to the jurisdictional Income Tax Office at Chennai was not sufficient. In the communication addressed to the Deputy Commissioner of Income Tax, Bangalore on 08.08.2013, the petitioner merely asked for transfer of the file to the respondents but did not take any steps for rectifying the mistake. Even during the re-assessment proceeding, the petitioner actively participated in the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in before the respondent that it was indeed entitled to claim depreciation on the Customer/Dealer and Vendor lists. No merits in quashing the impugned order in the light of the above reasoning. Therefore, the second respondent is directed to complete the re-assessment in accordance with law. - W.P.No.41473 of 2016 And W.M.P.Nos.35449 of 2016 & 21889 of 2020 - - - Dated:- 2-3-2021 - Hon'ble Mr.Justice C.Saravanan For the Petitioner : Mr.N.V.Balaji For the Respondents : M/s.Hema Muralikrishnan Senior Standing Counsel ORDER The petitioner is aggrieved by the impugned order dated 25.10.2016 passed by the second respondent in AACCD6947L/2009- 2010 disposing the objections dated 31.05.2016 filed by the petitioner against the invocation of Section 148 of the Income Tax Act, 1961 seeking to reopen the assessment for the Assessment Year 2009-2010 vide notice dated 31.03.2016. The operative portion of the impugned order overruling the objection of the petitioner is reproduced below:- AO s Observations There has been no discussion about the reasons for which the case has been reopened now in the original assessment order; while examining the intangible as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... steps under section 143(3) will not render the Assessing Officer powerless to initiate reassessment proceedings, even when intimation under section 143(1) has been issued as held by Hon ble Supreme Court Shri Krishnan Pvt. Ltd. Vs. Income Tax Officer Civil Appeal No.1562 of 1977 and Civil appeal No s 2101- 03 of 1980 B July 16, 1996. Moreover the mere production of books of account by assessee before Assessing Officer, there should be no presumption that all books seen by the Assessing Officer. It is duty of assessee to show all relevant particulars in books of accounts, not mere production of books, arguments that Assessing Officer could have been discovered is not correct as held in the case of Kantamaneni Venkatnarayana by Hon ble Supreme Court 63 ITR 638 . The principles have also been well settled and reiterated in numerous decisions of the Supreme Court. As observed in Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191 (SC) mere production of evidence before the ITO would not enough and that if some material for the assessment embedded in the evidence which the revenue could have uncovered but did not do so, it is the duty of the assessee to bring it to the not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 1,031.00 Millions as a going concern. 3. The said company filed its income tax returns for the Assessment Year 2009-2010 on 30.09.2009. The scrutiny assessment was completed on 01.03.2013. During the interregnum, the said Doosan International India Private Limited merged with the petitioner herein pursuant to an order passed by this Court in C.P.No.158 of 2011 on 25.11.2011 and an order passed by the Karnataka High Court in C.P.No.201 of 2011 on 17.02.2012. 4. Earlier, returns were filed in the name of amalgamated transferor company of Doosan International India Private Limited for the Assessment Year 2009-2010 and an assessment order came to be passed on 01.03.2013 in the original name of the merged company, i.e, Doodsan International India Private Limited, which had by them ceased to exist with the merger with effect from 01.04.2011. 5. After the assessment order dated 01.03.2013 came to be passed for the Assessment Year 2009-2010, an intimation was given both to the Income Tax officer, namely, the Assistant Commissioner of Income Tax at Chennai and Bangalore vide communication dated 08.08.2013 about the merger of the said Doosan International India Private Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gersoll-Rand Limited pursuant to the Business Transfer (Slump Sale) Agreement dated 29.11.2007 and claimed depreciation over both the tangible and intangible assets under Section 32 of the Act. As far as the intangible assets are concerned, the said Doosan International India Private Limited had claimed depreciation under the following heads:- i. Intellectual Property ii. Customer / Dealer and Vendor lists iii. Trained employee base iv. Trademarks v. Non-compete fees 11. In the scrutiny assessment, the petitioner by its letter/representation dated 21.09.2012 had clearly stated that in the return filed by said Doosan International India Private Limited, the value of intangible assets were as above and that the said company was claiming depreciation under Section 32 of the Income Tax Act, 1961. 12. It is noticed that though the notice dated 11.07.2012 was issued to the said Doosan International India Private Limited, the reply was filed on the letter head of the petitioner company, namely Doosan Infracore India Private Limited. This was perhaps on account of the fact that the said company had already been merged with the petitioner and stood dissolved without bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the petitioner further submits that the reopening of the assessment vide notice dated 31.03.2016 based on the reasons communicated vide communication dated 29.04.2016 was on account of change of opinion ignoring the fact that there was full and true disclosure by the petitioner when the petitioner participated in the proceedings which has culminated in the assessment order dated 01.03.2013 under Section 143(3) of the Income Tax Act, 1961. 17. It is further submitted that no new facts have come to light before the Authority to conclude that there was suppression of facts or failure to make full and true disclosure warranting invocation of proviso to Section 147 of the Act. The learned counsel for the petitioner places reliance on the following decisions:- Change of Opinion :- i. Commissioner of Income Tax Vs. Elgi Finance Limited , (2006) 286 ITR 674 (Madras) : (2006) 155 Taxman 124 (Madras). ii. Fenner (India) Limited Vs. Deputy Commissioner of Income-tax , (2000) 241 ITR 672 (Madras) : (1999) 107 Taxman 53 (Madras). iii. Commissioner of Income Tax Vs. Foramer France , (2003) 264 ITR 566 (SC) : (2003) 129 Taxman 72 (SC). iv. Foramer Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1999 and since the assessee had claimed the depreciation on the Customer / Vendor and Dealer list during the Assessment Year 2008-2009, the depreciation claimed during the subsequent years cannot be denied. 19. The learned counsel for the petitioner also attempted to distinguish the recent order of this Court in M/s. Mando Automotive India Private Limited Vs. The Deputy Commissioner of Income-tax, in W.P.No.2779 of 2017, dated 12.02.2021. He further submitted that the assessment order dated 01.03.2013 had been appealed by the petitioner though the Assessment pertains to the transferred company. 20. Defending the impugned order passed by the second respondent, the learned senior standing counsel for the respondents submits that the impugned order itself is very clear and that the merits of the case will be analyzed in the light of the various particulars by giving an opportunity to the petitioner for personal hearing and therefore, this Writ Petition was premature. 21. The learned senior standing counsel further submits that the arguments of the learned counsel for the petitioner that since the depreciation was allowed on Customer / Vendor and Dealer list during the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 25. Before proceeding further, I shall first deal with the preliminary submission of the learned counsel for the petitioner that the entire reassessment proceeding was without jurisdiction on the ground that the reassessment order was made in the name of Doosan International India Private Limited, a defunct company which has since merged with the petitioner. Reliance was placed on the decision of the Hon ble Supreme Court in Principal Commissioner of Income Tax Vs. Maruti Suzuki India Ltd. , 2019 SCC Online SC 928. The facts are distinguishable in the present case. The said decision is not applicable to the facts of the present case. In the present case, the transferor company Doosan International India Private Limited had filed a regular return on 30.09.2009 under Section 139 of the Income Tax Act, 1961. 26. Later, the transferor company Doosan International India Private Limited was merged/amalgamated with the petitioner and was ordered to be liquidated without being wound up by an order dated 25.11.2011 of this Court and an order dated 17.02.2012 of the Karnataka High Court. 27. As a result of the amalgamation/merger, the said Doosan International India Private Li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs on the understanding that the assets and liabilities of Doosan International India Private Limited stood vested with the petitioner and that the petitioner was representing its interest by defending the proceedings seeking to reopening of the assessment vide notice dated 30.03.2016 issued under Section 148 of the Income Tax Act, 1961. 36. Therefore, it would be absurd to hold that the order has been passed in the name of a defunct company to scuttle the re-assessment proceeding. Amalgamation cannot be used as a tool to defeat assessment and re-assessment proceedings as the sanctioned scheme of amalgamation itself takes care of such eventualities. It cannot be used to subvert assessment proceedings. 37. Clause 4.6 of the sanctioned Scheme of Amalgamation makes it clear that scheme was drawn up to comply with the conditions relating to Amalgamation as specified in Section 2 (1B) of the Income Tax Act, 1961. It also states that any terms or provisions of the Scheme which are found or interpreted to be inconsistent with the provisions of the said Section at a later date including resulting for an amendment of law or for any reason whatsoever after the effective date, the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble asset to claim depreciation and that mere list of Customers/Vendor and Dealer would not entitle the company to claim depreciation. 43. Since the notice has been issued for reopening the assessment on the last day of the limitation under proviso to Section 147 of the Income Tax Act, 1961, it is incumbent on the part of the respondents to have reasons to believe that there was a failure on the part of the said company to truly and fully disclose all material required for assessment. 44. From a reading of the reply filed by the petitioner on behalf of the said company at the time of assessment, it is evident that there was no explanation offered for claiming depreciation on the amount claimed and allocated towards the purported Customers/Dealer and Vendor List. 45. In the reply to notice dated 11.7.2012 issue under Section 142(1) of the Income Tax Act, 1961, the petitioner has merely given a breakup. It did not give any document to substantiate the depreciation on the Customer/Dealer and Vendor lists. Thus, it cannot be said that the petitioner had truly and fully disclosed all material that was required for assessment. Therefore, there can be no interference at this stag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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